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DOCUMENT  No.  58. 

BOARD  OF  ALBUMEN, 

DECEMBER  ,07,  184?.       '  ^ 


JK      ai 


REPORT 


OF    THE 


CROTON  AQUEDUCT  BOARD, 


IN    RELATION   TO 


THE  WAYS  AND  MEANS  OF  PAYING  THE 


CROTON  WATER  DEBT. 


N  E  W  -  Y  O  R  K  : 

CHAS.  KING,  Printer  to  the  Board  of  Aldermen. 

1842. 


Ml 


DOCUMENT  No.  58. 


BOARD  OF  ALDERMEN, 

DECEMBER  27,  1842. 


REPORT  OF  THE  CROTON  AQUEDUCT  BOARD, 

In  answer  to  the  Resolutions  of  the  Boards  of  Aldermen 
and  Assistant  Aldermen,  in  relation  to  the  Ways  and 
Means  of  paying  the  Croton  Water  Debt. 

Laid  on  the  table,  and  double  the  usual  number  ordered  to  be  printed, 

JOS.  R.  TAYLOR,  CLERK. 


The  Croton  Aqueduct  Board  of  the  city  of  New- York,  to 
whom  were  referred  the  resolutions  introduced  into  the 
Board  of  Aldermen,  and  also  the  resolutions  introduced  into 
the  Board  of  Assistant  Aldermen,  in  respect  to  Water  taxes 
by  said  resolutions  proposed  to  be  levied  upon  buildings  and 

M162822 


t?  X-     *'    ^  *»«    C«»"1  *      J|     *•*    **         pec  * 

Doc.  No.  58.]  542 


the  rents  of  buildings,  and  upon  merchandize  and  all  other 
personal  property,  and  upon  the  sales  of  all  goods,  ware  s 
and  merchandize  sold  within  the  said  city,  and  upon  com- 
missions arising  from  the  negotiation  and  sale  of  foreign 
exchange,  and  upon  the  cost  of  erection  of  all  houses  and 
the  building  of  ships  or  vessels,  and  upon  all  manufacturin  g 
and  mechanical  productions,  and  upon  the  salaries,  fees,  or 
perquisites  of  professions  (when  amounting  to  seven  hundred 
dollars),  copies  of  which  resolutions  are  hereto  subjoined,  beg 
leave  respectfully  to 

REPORT  : 

That  they  have  examined  these  resolutions,  with  a  due 
sense  of  the  magnitude  of  the  interests  involved,  presenting 
for  consideration  the  very  important  question,  from  what 
resources,  and  within  what  time,  the  large  debt  of  twelve 
and  a  half  millions  incurred  in  constructing  the  Croton  Aque- 
duct is  to  be  paid, — what  portion  of  those  resources  are  pro- 
perly applicable  to  the  principal,  and  what  portion  to  the  in- 
terest of  the  debt, — what  part  of  the  burthen  must  be  borne 
by  taxation, — and  upon  what  particular  interests  or  species 
of  property,  or  branches  of  business,  and  in  what  proportions, 
the  burthen  can  best  be  laid.  It  need  hardly  be  said,  that 
in  the  proper  adjustment  of  such  a  question,  the  lasting  wel- 
fare of  every  person  having  any  stake  in  the  property  or  busi- 
ness of  the  city  is  deeply  concerned. 

The  cost  of  the  Aqueduct  already  incurred,  as  ascertained 
from  the  Comptroller's  books,  including  every  expense  at- 
tending the  introduction  of  the  Croton  Water  into  the  city, 
is  811,896,775,  including  in  that  amount  the  sum  of 
81,580,290,  which  has  been  paid  from  the  loans  negociated, 
for  interest  accruing  up  to  the  time  of  putting  the  work  in 


543  [Doc.  No.  58. 

operation,  and  also  including  $647,157,  being  the  discount 
paid  on  the  sale  of  the  stocks.  The  further  sum  of 
$200,000  will  be  required  to  complete  the  laying  of  the  pipes 
through  the  streets  of  the  city ;  and  the  additional  sum  of 
$500,000  is  supposed  to  be  necessary  to  finish  the  bridge 
over  the  Harlaem  River,  now  temporarily  crossed  with  iron 
pipes. 

Under  successive  laws  of  the  Legislature,  the  city  has 
been  authorized  to  issue  stocks  for  twelve  millions  of  dollars, 
to  defray  the  cost  of  the  Aqueduct,  under  which  permanent 
loans  have  been  made  as  follows  : 

At  7  per  cent,  interest,  $120,305,  redeemable  May  1,  1847. 

Do.  do.  90,357  do.  Feb.  1,1852. 

Do.  do.  799,850  do.  Aug.  1, 1852. 

Do.  do.  989,488  do.  May  1,1857. 

At  5  per  cent,  interest,  3,000,000  do.  May  1, 1858. 

Do.  do.  2,500,000  do.  Jan.  1,  1860. 

Do.  do.  3,000,000  do.  Nov.  1,1870. 

Do.  do.  190,000  do.  Jan.  1,  1880. 

Do.  do.  120,500  do.  Nov.  1, 1880. 


$10,810,500 
There  is  yet  to  be  is- 
sued, and  probably 
at  5  per  cent $1,189,500 

15 

$12,000,000 

On  account  of  this  balance  of  $1,189,500,  the  city  treasury 
has  temporarily  advanced  $1,086,275,  which  has  been  ex- 
pended for  the  work  ;  so  that  the  sum  now  remaining  unex- 
pended of  the  twelve  millions,  and  applicable  to  the  exten- 


Doc.  No.  58.]  544 

sion  of  the  pipes   and   completion  of  the  Harlaem   River 

bridge,  is  but 8103,225 

The  amount  required  for  those  objects,  as 
above  stated,  will  be $700,000 


Leaving  to  be  provided,  in  addition  to  the 
twelve  millions $596,775 

It  may  therefore  be  estimated  in  round  numbers  that  the 
permanent  Water  Debt  will  be  twelve  and  a  half  millions. 

By  the  terms  of  the  loans  under  which  these  stocks  have 
been  issued,  they  are  redeemable  "  on  or  after"  the  times 
above  indicated — implying  the  mutual  right  of  the 
creditor  to  demand,  and  of  the  city  to  redeem,  the  stock, 
either  on  or  after  those  times.  In  the  present  examina- 
tion, the  Croton  Aqueduct  Board  have  therefore  proceeded 
on  the  basis,  that  the  debt  is  to  be  extinguished  by  ac- 
tual payment  as  it  shall  fall  due.  The  character  of  the 
city,  and  the  due  preservation  of  its  fiscal  credit,  would  at  all 
times  forbid  the  idea  of  postponing  the  payment  of  any  of 
its  debt  after  it  should  become  payable.  In  the  present 
state  of  American  credits,  and  amid  the  too  frequent  exam- 
ples of  neglected  or  violated  public  faith,  by  which  the  cha- 
racter of  our  country  is  degraded,  it  is  peculiarly  the  duty 
of  this  commercial  city  to  set  the  example  of  preparing  at 
once,  and  of  declaring  to  the  world  that  it  is  preparing,  to 
pay  the  debt  promptly  and  punctually  as  soon  as  it  shall  be- 
come redeemable.  The  public  credit  is  the  most  precious 
portion  of  the  public  property,  and  it  can  only  be  preserved 
by  preparing  in  season  to  perform  our  public  engagements. 

The  resources  applicable  to  the  principal  of  the  debt  are 
embraced  in  the  Sinking  Fund,  which  was  established  by  the 


545  [Doc.  No.  58. 

law  of  the  State,  of  June,  1812,  and  by  several  subsequent 
enactments  of  the  Common  Council,  under  which  certain 
specified  revenues,  arising  from  markets,  quit-rents,  coach 
and  pawn-brokers'  licenses,  and  other  productive  items,  and 
also  the  proceeds  of  a  large  amount  of  real  estate,  together 
with  the  revenue  to  be  derived  from  the  Croton  Water,  are 
especially  set  apart  to  accumulate  as  a  fund  for  the  redemp- 
tion of  the  debt.  These  monies  are  invested,  as  received, 
in  purchasing  the  city  stocks,  and  no  portion  of  them  has 
ever  been  applied  to  the  payment  of  interest  on  the  city 
debt.  On  the  contrary,  by  the  terms  of  the  laws  by  which 
the  fund  is  established,  it  annually  receives  from  the  general 
revenues  of  the  city  the  interest  on  the  stocks  so  purchased. 
By  this  process  the  Fund  has  steadily  accumulated,  and 
has  now  reached  an  amount  equal,  within  a  small  fraction, 
to  the  whole  of  the  City  Debt,  not  otherwise  provided  for, 
exclusive  of  that  incurred  for  the  Croton  Aqueduct,  so  that 
the  fund  may  now  be  regarded  as  exclusively  applicable  to 
the  extinction  of  the  twelve  and  a  half  millions  under  ex- 
amination. The  annual  receipts  of  this  Fund  are  estimated, 
in  the  last  Annual  Report  of  the  City  Comptroller,  at 
$230,305.  It  is  believed  that,  excluding  the  proceeds  of 
sales  of  real  estate,  the  annual  amount  may  be  assumed  to 
be  8180,000. 

By  the  terms  of  the  law  establishing  the  Fund,  the  stocks 
purchased  are  to  be  held  by  the  Commissioners  of  the  Sink- 
ing Fund  until  the  time  fixed  for  their  final  redemption,  and  the 
interest  thereon  is  to  be  raised  meanwhile  by  taxation.  Con- 
sidering, however,  the  amount  of  stock  which  has  been 
issued  for  the  Water  Loans,  and  the  impolicy  and  hazard 
of  leaving  outstanding  and  uncancelled,  large  amounts  of 
stock  which  are  virtually  redeemed,  the  Croton  Aqueduct 
Board  would  suggest  the  expediency  of  altering  the  law  so  far 


Doc.  No.  58.]  546 

as  to  direct  the  stocks  purchased  for  the  Sinking  Fund  to 
be  cancelled,  whenever  and  as  often  as  the  amount  here- 
after accumulated  shall  reach  the  sum  of  one  million  of 
dollars.  In  that  case  the  amount  to  be  collected  in  taxes 
from  our  citizens,  in  any  single  year,  to  be  applied  di- 
rectly to  the  Sinking  Fund,  on  account  of  the  Water  Debt, 
could  never  exceed  fifty  thousand  dollars,  being  the  interest, 
on  the  million,  while  the  burthen  of  annual  taxation,  whether 
direct  or  indirect,  would  be  relieved  to  the  amount  of  fifty 
thousand  dollars,  whenever  and  as  often  as  a  million 
should  be  cancelled.  The  great  object,  then,  to  be  kept 
steadily  in  view,  should  be  to  expedite  as  rapidly  as  practica- 
ble the  operations  of  the  Sinking  Fund,  and  for  that  purpose 
to  render  available  all  the  resources  fairly  within  our  reach. 

Among  these  resources,  stands  most  prominent  the  large 
amount  of  real  estate  now  held  by  the  city,  and  not 
required  for  its  public  uses.  It  is  true  that  a  portion  of 
this  property  is  productive,  but  to  an  amount  far  less  than 
the  interest  of  the  sum  which  it  will  command  in  cash.  The 
rents  now  amount  to  only  827,613  24,  and  even  that  amount 
is  liable  to  depredation  from  the  officers  employed  to  col- 
lect it,  as  experience  has  unhappily  shown.  The  princi- 
pal, consisting  mainly  of  valuable  houses  and  lots  in  the 
vicinity  of  Chatham  and  Pearl  streets,  with  some  available 
property  at  Brooklyn,  was  valued  in  the  last  annual  report 
of  the  City  Comptroller  at  $1,031,700.  The  present  Comp- 
troller, in  a  recent  communication  to  this  Board,  values  it 
even  in  the  present  depressed  state  of  prices  at  8648,700. 
In  addition  to  this  sum,  there  are  the  quit-rents  reserved 
from  water  lots  heretofore  sold  by  the  city,  and  now  yield- 
ing a  revenue  of  five  per  cent,  upon  a  capital  of  8342,000. 

It  is  quite  clear,  that  if  this  were  the  case  of  an  individual 


547  [Doc.  No.  58. 

proprietor,  his  interest  would  be  promoted  by  selling 
these  items  of  property,  and  applying  the  amount,  as 
far  as  it  would  go,  to  the  extinction  of  the  debt ;  but  still 
more  evidently  would  such  a  course  be  judicious,  where 
a  government  like  that  of  this  city  is  concerned.  There 
can  be  no  good  reason,  why.  the  city  government  should 
manage  any  real  estate  whatever,  not  wanted  for  its  legitimate 
public  uses.  The  sale  of  all  its  superfluous  property  would 
materially  simplify  the  public  business  and  accounts,  dimin- 
ish a  patronage  already  too  large,  lessen  the  number  of  useless 
officers,  and  save  our  citizens  and  the  Treasury  from  the 
dangers  and  demoralizing  effects  of  embezzlement. 

Another  large  and  important  branch  of  the  public  proper- 
ty, which  would  seem  under  the  circumstances  to  be  fairly 
applicable  to  the  Public  Debt,  are  the  wharves  and  piers. 
It  may  have  been,  and  probably  was,  expedient  for  the  pub- 
lic treasury  in  the  first  instance  to  advance  the  cost  of  con- 
structing these  conveniences  for  our  foreign  and  domestic 
commerce  ;  but  it  can  hardly  be  claimed  that  the  city  should 
continue  to  maintain  them,  when  it  is  notorious  that  they 
can  be  better  managed  in  the  hands  of  individual  owners. 
The  sums  disbursed  by  the  City  Treasury  upon  these  struc- 
tures, during  the  sixteen  years  ending  the  1st  of  January 
last,  amount  to  $1,121,472,  whereas  the  total  receipts  from 
this  source  during  the  same  period,  amount  only  to 
81,050,715.  The  revenues  are  constantly  absorbed  in  the 
cost  of  repairs  and  of  new  wharves  rendered  necessary  by 
the  increase  of  our  commerce.  It  is  believed  that  this  proper- 
ty could  now  be  sold  for  at  least  a  million  of  dollars.  The  ap- 
plication of  such  a  sum  would  very  materially  expedite  the 
operations  of  the  Sinking  Fund,  and  hasten  the  extinguish- 
ment of  the  Public  Debt.  The  opinion  has  been  expressed 
in  some  quarters,  that  instead  of  selling  these  wharves  and 
93 


Doc.  No.  58.]  548 

piers,  a  wharfage  duty  should  be  exacted  from  all  merchan- 
dize, packages,  and  commodities  landed,  and  thus  render  this 
branch  of  property  tributary  to  the  treasury.  The  objec- 
tion to  this  measure  will  be  obvious  in  the  burthens  it  would 
impose  upon  our  trade,  already  struggling  with  many  dis- 
couragements ;  in  the  difficulty  which  might  be  found  in  ob- 
taining from  the  Legislature  the  necessary  permission  to 
levy  such  a  transit  duty  on  the  productions  coming  as  well 
from  our  own  interior  as  elsewhere  ;  and  in  the  well  ground- 
ed apprehension,  that  the  nett  revenues  to  be  realized  by  the 
Treasury  would  very  inadequately  compensate  the  city 
for  the  risk  of  collection,  and  the  burthen  and  inconve- 
nience of  withholding  the  whole  of  the  principal  from  the 
Sinking  Fund. 

A  remaining  resource,  though  not  immediately  available, 
but  which  may  eventually  be  applied  to  a  large  amount  to 
the  reduction  of  the  debt,  is  found  in  the  great  body  of  va- 
cant lands  belonging  to  the  city,  comprising  several  thou- 
sand building  lots,  extending  at  intervals  from  23d  street  to 
93d  street,  some  of  which  are  nearly  ready  to  be  brought 
into  market  for  building  purposes,  and  the  residue  will  pro- 
bably be  required  for  that  object  by  the  time  that  the  greater 
portion  of  the  debt  will  arrive  at  maturity.  Opinions  have 
indeed  been  expressed  that  the  proceeds  of  these  lands 
alone,  if  retained  until  the  last  portion  of  the  debt  is  payable, 
would  defray  the  whole  cost  of  the  Aqueduct ;  but  such  an 
estimate  can  of  course  find  no  place  in  a  financial  calcu- 
lation, except  as  a  reason  for  suggesting,  that  as  the  value 
of  these  lands  is  mostly  prospective,  and  could  not  be  real- 
ized in  the  present  depression  of  prices,  they  may  be  pru- 
dently retained  until  the  future  developement  of  our  trade, 
and  consequent  extension  of  the  city,  shall  render  them  more 
available.  The  late  Comptroller,  in  his  last  Annual  Report, 


549  [Doc.  No.  58. 

estimates,  at  present  prices,  the  portion  of  these  lands  north 
of  42d  street,  at  $1,268,000,  and  the  portion  between  42d 
street  and  23d  street  at  $928,600.  It  will  undoubtedly  be 
expedient  to  sell  off  the  latter  portion  and  turn  it  into  money, 
as  soon  as  the  approach  of  the  compact  part  of  the  city  shall 
enable  the  Treasury  to  realize  reasonable  prices. 

In  the  mean  time,  the  Croton  Aqueduct  Board,  con- 
sidering the  heavy  taxes  which  must  become  necessary 
to  pay  the  interest  on  the  Water  Debt,  feel  it  incumbent  on 
them  earnestly  to  urge  upon  the  Common  Council  the  speedy 
sale  of  those  portions  of  the  real  estate  of  the  city  above 
recommended  ;  and  they  would  suggest,  that  for  the  pur- 
pose of  hastening  that  desirable  step,  the  sale  should  be  com- 
mitted to  a  special  and  responsible  department  of  the  City 
Government,  to  be  specifically  charged  with  that  duty,  and 
instructed  to  prosecute  the  business  with  the  same  discretion, 
and  efficiency,  that  an  individual  proprietor  would  ex- 
hibit in  the  management  of  his  private  affairs.  If  this  shall 
be  done  with  promptness  and  fidelity,  there  can  be  no  doubt 
but  that  some  three  or  four  millions  of  dollars  maybe  speed- 
ily realized,  and  applied  in  diminution  of  the  Water  Debt. 

The  interest  annually  payable  on  the  Water  Debt  will 
amount  to  $665,000,  and  that  sum  must  be  raised  by  tax- 
ation, direct  or  indirect ;  and  it  can  only  be  reduced  by 
applying  from  time  to  time  the  avails  of  the  Sinking 
Fund,  to  the  extinguishment  of  the  principal  and  consequent 
diminution  of  the  interest.  The  taxable  property  in  the 
city,  real  and  personal,  is  assessed  for  the  present  year  1842, 
at  176  millions,  real,  and  61  millions,  personal  estate, — in  all 
237  millions, — and  on  which  a  tax  will  consequently  be  re- 
quired of  28  cents  on  the  100  dollars. 


Doc.  No.  58.]  550 

The  precise  time  when  the  Croton  Aqueduct  may  be 
deemed  to  have  been  completed,  so  that  the  interest  should 
begin  to  accrue,  and  from  which  time  the  monies  necessary 
to  pay  it  should  cease  to  be  taken  from  the  principal  of  the 
monies  borrowed,  has  not  yet  been  accurately  determined. 
Probably  the  1st  of  October,  in  the  present  year,  1842,  may 
have  been  taken  as  the  starting  point,  inasmuch  as  the  Board 
of  Supervisors  have  provided  for  raising  by  tax,  for  the  in- 
terest of  the  current  year,  the  sum  only  of  $ 475,566,  or  20 
cents  on  the  100  dollars,  being  a  portion  only  of  the  sum  re- 
quisite for  a  full  year,  but  sufficing  to  defray  the  interest 
up  to  the  first  of  August  next. 

It  is  at  this  point  that  questions  have  been  raised,  whether  the 
rents  to  be  received  for  the  use  of  the  Croton  Water  cannot 
be  applied  to  the  interest,  or  whether  they  must  be  retained 
and  added  to  the  Sinking  Fund,  for  the  purpose  of  extinguishing 
the  principal ;  or  whether,  as  is  proposed  in  the  resolutions  in 
the  Board  of  Aldermen,  the  Water  Rents  shall  be  relinquished 
altogether,  and  our  inhabitants  permitted  to  take  the  water 
into  their  dwellings  and  places  of  business  free  of  charge. 
The  decision  of  these  questions  involves  very  serious  conse- 
quences, and  they  are  entitled  to  a  careful  and  candid  ex- 
amination. 

By  recurring  to  the  report  of  the  Water  Commission- 
ers, submitted  to  the  Common  Council  in  1835,  and  by 
the  Common  Council  to  the  people  at  the  Election  in  April 
of  that  year,  it  will  appear  that  it  was  then  intended  to 
apply  the  Water  Rents  in  the  first  instance  to  the  interest. 
"  When  the  project,"  say  the  Water  Commissioners  in  the 
report,  "  shall  be  completed,  the  eventual  receipts  will  more 
than  pay  the  interest  on  the  capital  expended,  and  the  annual 
cost  of  attending  the  works,  and  in  due  time  leave  a  sur- 


551  [Doc.  No.  58. 

plus   for   the   redemption   of   the   debt   that    may   be   in- 
curred." 

The  cost  of  the  work  was  estimated  in  that  report  at 
$5,512,236  72  ;  but  the  Commissioners  plainly  intimated  their 
opinion,  that  the  duty  of  paying  the  whole  of  the  principal 
might  properly  be  devolved  upon  posterity,  and  the  present 
generation  exempted  from  any  portion  of  the  burthen  beyond 
the  payment  of  the  interest.  "  A  work  of  this  nature,"  con- 
tinues the  same  report,  "  is  a  boon  to  posterity  of  the  first 
magnitude,  and  it  is  but  reasonable  and  just,  therefore,  that 
as  they  are  to  reap  the  benefit  of  the  project,  and  be  enabled  9 
as  the  population  increases,  and  the  income  augments,  to 
discharge  the  debt  without  inconvenience,  the  first  cost 
of  the  work  should  remain  a  lien  on  those  who  succeed  us. 
The  only  obligation,"  it  adds,  "  on  the  present  generation, 
constructing  a  work  of  this  magnitude  and  importance,  is, 
that  they  pay  the  interest  of  the  debt  incurred,  leaving  the 
principal  to  be  provided  for  by  those  who  come  after  them." 

No  attempt  was  made  in  the  report  to  fix  the  time  when 
the  principal  was  to  be  finally  extinguished  ;  nor  was  any 
calculation  exhibited,  or  plan  of  finance  prepared,  that 
would  indicate  which  of  the  successive  generations  em- 
braced under  the  term  "posterity"  were  to  assume  the 
burthen.  The  Legislature,  however,  by  the  law  of  May  2d, 
1S34,  had  in  some  degree  fixed  a  limit  within  which  the 
duty  was  to  be  discharged,  by  requiring  that  the  time  for 
redeeming  the  stock  should  not  be  less  than  ten  nor  more 
than  fifty  years. 

The  Common  Council,  however,  by  the  law  of  May,  1835, 
which  was  their  first  act  of  fiscal  legislation,  after  the  electors 
had  decided  in  favor  of  the  work,  in  providing  for  an  issue  of 


Doc.  No.  58.]  552 

two  and  a  half  millions  of  stock,  thought  it  proper,  at  the  same 
time,  to  lay  the  foundation  of  a  fund  for  extinguishing  the 
principal,  by  enacting  "  that  all  the  revenue  to  be  received 
for  water  to  be  procured  by  the  said  work,  and  fur- 
nished to  the  inhabitants  of  the  city,  shall  be  especial- 
ly appropriated  as  a  Sinking  Fund  towards  the  re- 
demption of  said  Water  Stock."  Similar  pledges,  and 
in  similar  terms,  are  contained  in  each  of  the  subsequent 
laws  of  May  3,  1838,  April  23d,  1840,  and  June  25, 
1841  ;  under  which  the  successive  issues  of  stock  were 
made,  amounting  in  the  aggregate  to  nine  and  a  half  mil- 
lions of  dollars.  The  Legislature  of  the  State,  in  autho- 
rizing the  City  Government  to  create  the  stock  thus  issued 
from  time  to  time,  also  sanctioned  and  enforced  the  pledges 
given  on  the  part  of  the  city,  in  the  law  of  1835  ;  for  in  every 
instance  thereafter,  the  Legislature,  in  granting  the  necessary 
power  to  raise  further  amounts  by  loan,  expressly  enacted 
that  all  the  provisions  of  the  laws  before  passed,  pledging  the 
faith  of  the  city,  and  providing  a  Sinking  Fund  for  the  re- 
demption of  the  stock  issued  by  virtue  thereof,  should  be  ap- 
plicable to  the  stocks  issued  in  pursuance  of  those  subse- 
quent acts  of  the  Legislature.  As  a  further  manifestation  of 
the  understanding  of  the  Legislature  in  this  matter,  they  em- 
powered the  City  Government,  by  the  law  passed  May  26th, 
1841,  to  raise  by  tax  upon  the  property  of  the  inhabitants, 
and  situated  therein,  "  such  amount  of  money  as  shall  be  re- 
quisite to  defray  the  interest  on  the  Water  Stock."  The 
Aqueduct  not  having  been  completed  and  put  in  operation 
until  the  4th  of  July  last,  no  tax  was  laid  until  the  present 
year  to  defray  the  interest. 

The  Croton  Aqueduct  Board  are  aware  it  may  be  con- 
tended, that  in  the  laws  containing  the  pledges  above  referred 


553  [Doc.  No.  58. 

to,  the  word  "  redemption"  is  to  be  construed  as  synonymous 
only  with  the  words  "  payment  of  the  interest  and  reimburse- 
ment of  the  principal" :  the  phraseology  employed  in  the  State 
Constitution  in  pledging  the  Canal  revenues  for  the  payment 
of  the  Canal  debt.  But  such  is  by  no  means  a  necessary  or 
a  fair  construction,  so  far  at  least  as  the  public  creditor  is  con- 
cerned. For  all  rational  pur  poses  the  "  redemption"  of  the  stock 
means  its  payment  and  extinguishment,  and  the  Water  Rents 
which  are  declared  to  be  pledged  for  that  purpose,  "  as  a 
Sinking  Fund,"  must,  by  all  just  intendment,  be  held  and  em- 
ployed as  a  Sinking  Fund, — the  peculiar  office  of  which,  as 
the  term  denotes,  is  to  sink,  or  lower,  or  reduce  the  amount 
of  the  principal,  and  not  merely  to  prevent  the  increase  or 
accumulation  of  the  interest. 


A  fair  construction  of  this  pledge  would,  however,  apply 
it  only  to  the  nett  rents  derived  from  the  Aqueduct,  and 
could  not  exclude  the  city  government  from  the  expenditure 
of  a  sufficient  part  of  the  gross  revenue,  to  pay  for  the  whole 
management  of  the  Water  Department,  the  repairs  neces- 
sary to  keep  the  works  in  good  order,  and  the  additions  re- 
quisite to  increase  the  annual  income.  The  large  outlay 
indispensable,  annually,  for  these  objects,  would  present  of 
itself  an  insuperable  objection  in  the  present  state  of  the  city 
finances,  to  the  proposition  that  the  water  should  be  free 
for  each  individual,  to  supply  his  dwelling,  warehouse,  or 
workshop,  without  cost  for  its  use,  or  at  a  charge  greatly 
reduced  from  the  present  prices.  While  those  individuals 
only,  whose  interest  or  convenience  might  prompt  them 
to  take  the  water,  would  be  relieved  from  the  duty  of 
paying  a  fair  equivalent  for  its  use,  the  total  relin- 
quishment  of  the  rent,  or  a  material  reduction  of  the 
rates,  would  obviously  lengthen  the  period  of  taxa- 
tion, applicable  to  the  whole  community,  which  it  is  so 


Doc.  No.  58.]  554 

plainly  the  policy  of  the  city  to  abridge.     In  either  aspect, 
we  should  disregard  that  rapid  augmentation  of  the  Sinking 
Fund,   to   which  the   Water  Rents,   if  preserved  at  their 
present    moderate    rates,    are    destined    very    largely    to 
contribute.     Upon  the  slow  or  the  speedy  progress  of  that 
fund  towards  its  object,  it   wholly  depends,  whether  the 
excess  of  general  taxation   in  this  city,  over  the  amount  its 
inhabitants   may  bear  without   inconvenience,  shall  be  of 
longer  or  shorter  duration.     Nothing  is  more  fallacious  than 
the   idea,  often  expressed,  that  equality  would  be   secured 
in  the  use   of  water,  by  allowing   each  individual  to  carry 
it  whither,  and  employ  it  where,  and  in  what  quantity,  he 
pleases.     Such  a  permission,  besides  that  it  would  be  irre- 
concileable  with  any  salutary  control  by  the  public,  over 
the  great  work  they  have  erected,  would  at  once  cause  the 
most  palpable  inequality ;  giving  to  each  grade  of  wealth 
in  the  community  its  advantages  over  that  next  below  it,  and 
furnishing  the  man  of  business,  to  whom  a  large  daily  sup- 
ply of  water  is  part  of  his  capital  in  trade,  an  aid  from  the 
public,  withheld  from  his  fellow-citizens  engaged  in  other 
occupations.     Positive  equality  in  the  matter,  is  evidently 
unattainable  ;  but  the  nearest  practicable   approach  to  it, 
will   be   found  in  the  system  now  partially  in  operation, 
and  which   will  be   fully  carried   into  effect  when   the  free 
hydrants  shall  be  established.     The  completion  of  that  sys- 
tem is  only  for  a  short  time  delayed  by  the  necessity  of  a 
sufficient  trial,  during   the  present  winter,  of  the  several 
forms  of  hydrant  proposed  for  use,  before  the  city  shall 
incur  the  large  expenditure  which  their  introduction  will 
occasion.     That  system  is  the  one  to  which  the  Corporation 
and  the   Electors  of  the  city  pledged  themselves  in  1835  ; 
and  contemplates  payment  from  all  who  have  the  water 
delivered  in  their  houses,  or  employ  it  in  their  business, — 
and  exemption  from  payment,  on  the  part  of  the  poor,  and 


555  [Doc.  No.  58. 

of  all  others  who  may  receive  it  from  the  free  hydrants, 
"  as  a  means  of  cleanliness,  nourishment,  and  health." 


The  Croton  Aqueduct  Board  cannot  dismiss  this  part  of 
the  subject,  without  adding  the  remark,  that  when  the  pledge 
was  given  to  the  public  creditor,  of  the  proceeds  of  the 
Water  Rents  as  a  Sinking  Fund  for  the  redemption  of  his 
loan,  it  could  not  have  been  intended  or  received  otherwise 
than  as  an  honest  assurance  that  those  rents  should  be  near- 
ly, if  not  altogether,  an  equivalent  for  the  use  of  the  water. 
The  performance  should  fulfil  the  promise.  Before  the 
pledge  was  offered,  the  Water  Commissioners  had  presented 
to  the  Corporation,  and  to  the  Electors  of \  the  city,  a  tariff 
of  rates  for  the  use  of  the  water,  which,  though  differing 
in  various  particulars  from  that  now  in  operation,  being 
in  some  of  its  charges  arithmetically  lower,  was  neverthe- 
less positively  higher  in  others,  and  much  exceeded  it  re- 
latively throughout,  when  we  take  into  consideration  the 
great  difference  between  the  cost  of  the  work  as  then  es- 
timated, and  that  which  since  has  been  actually  incurred. 

For  a  supply  of  water  sufficient  for  all  the  wants  of  a 
family,  and  furnished  in  such  abundance  and  purity  as  to  su- 
persede the  necessity  of  private  wells,  and  rain  and  filtering 
cisterns,  the  amount  charged  at  the  rates  now  established, 
is  less  than  the  sums  which  heretofore  have  been  readily 
paid  for  a  very  stinted  allowance  of  spring  water,  delivered 
daily  at  our  doors.  It  is  submitted,  whether  rates  of  charge 
not  exceeding  the  limits  announced  by  the  city  government, 
in  dealing  with  the  public  creditor,  can  be  materially  diminish- 
ed, without  destroying  or  impairing  the  means  of  redemption 
solemnly  appropriated  for  his  security,  and  thus  tarnishing 
the  public  faith.  The  pledge  is  equally  violated  by  the  man- 
94 


Doc.  No.  58.]  556 

ifest  evasion,  as  by  the  bold  denial,  or  avowed  disregard  of 
the  creditor's  rights. 

The  amount  of  Water  Rents,  which  will  probably  be  real- 
ized under  the  present  rates,  cannot  yet  be  computed  with  the 
certainty  requisite  to  form  the  basis  of  a  fiscal  system. 
The  water  was  introduced  into  the  city  on  the  4th  of  July 
last,  after  most  of  our  inhabitants  had  hired  their  present 
places  of  abode  for  the  current  year  ;  and  at  a  season  when 
landlords  were  not  disposed  to  incur  the  expense  of  introdu- 
cing the  water,  until  the  expiration  of  the  year.  From  the 
3rd  of  October  to  the  date  of  the  present  report,  being  a  pe- 
riod of  twelve  weeks,  during  which  the  Croton  Aqueduct 
Board  have  received  the  Water  Rents,  939  permits  have  been 
issued,  all  expiring  on  the  1st  of  May  next,  yielding  rents  at 
the  rate  of  $16,635  for  a  full  year.  The  amount  actually  re- 
ceived for  these  fractional  portions  of  the  year  is  89,542. 
If  the  number  of  applicants  should  maintain  the  same  ratio, 
up  to  the  1st  of  May  next,  the  rents  for  a  full  year  would 
amount  to  872,000.  It  is  to  be  expected  that  immediately 
before  and  after  that  period,  the  number  of  permits  will  be 
largely  increased,  so  that  the  rents  for  the  full  year  commen- 
cing May  1st,  1843,  may  probably  reach  8150,000.  The 
annual  amount  to  be  estimated  beyond  that  time  is  necessarily 
conjectural,  but  it  may  reasonably  be  anticipated  to  reach,  at 
the  end  of  five  or  six  years,  the  sum  of  four  hundred  thou- 
sand dollars.  We  must  be  prepared  however  to  expect  some 
delay  in  the  general  introduction  of  the  water.  The  gross 
receipts  from  the  Fairmount  Water  Works,  at  Philadelphia, 
(their  rates  being  somewhat  lower  than  ours),  was  890,531 
in  1834;  8111,883  in  1837;  and  8141,339  in  1841.  The 
latter  sum  was  paid  by  21,528  water  takers.  The  present 
population  of  that  city  is  228,991,  shewing  about  one  water- 
taker  to  every  ten  inhabitants.  In  the  city  of  London, 


557  [Doc.  No.  58 

with  a  population  of  1,400,000  in  the  year  1828,  there  were 
177,100  water-takers,  being  one  to  every  eight  inhabitants. 
At  the  ratio  shown  in  Philadelphia,  a  population  of  350,000 
in  our  city,  would  furnish  about  35,000  water-takers. 

It  will  be  necessary  and  proper,  as  before  remarked,  to 
deduct  from  the  Water  Rents  the  sums  necessary  for  cur- 
rent repairs  and  superintendence,  including  the  cost  of  fur- 
ther pipes,  or  any  additional  structures  requisite  for  the  im- 
provement or  extension  of  the  work.  In  no  event  should 
the  principal  of  the  debt  be  increased  beyond  the  twelve 
and  a  half  millions,  the  first  cost  of  the  work. 

If  the  facts  above  presented  be  correctly  stated,  it  will  fol- 
low that  no  part  of  the  nett  Water  Rents  will  be  applicable  to 
the  interest  of  the  existing  debt,  but  that  their  only  office  will 
be  to  aid  in  extinguishing  the  principal,  and  consequently  that 
the  interest,  now  amounting  to  8665,000  annually,  must 
be  levied  by  taxation  either  on  the  general  property  of  our 
inhabitants,  or  upon  such  portion  of  it,  or  such  particular 
branches  of  their  business,  as  ought  in  justice  and  good  poli- 
cy to  bear  it.  And  this  brings  us  to  the  respective  propo- 
sitions introduced  into  the  Boards  of  Aldermen  and  Assis- 
tant Aldermen,  and  now  referred  to  the  Croton  Aqueduct 
Board. 

In  the  Board  of  Assistant  Aldermen  it  is  proposed  to  levy 
an  annual  tax  of  3  per  cent,  on  the  rents  of  all  the  buildings 
in  the  city ;  valuing  those  rents  at  $9,750,000,  on  which 
3  per  cent,  is  8292,500  ;  and  also  a  tax  of  one  half  of  one  per 
cent,  on  all  the  personal  property  in  the  city — valuing  it  at 
865,000,000 — on  which  the  one  half  of  one  per  cent,  if 
$325,000. 


Doc.  No.  58.]  558 

In  the  Board  of  Aldermen  it  is  proposed  that  the  inhabi- 
tants of  the  city  be  permitted,  at  their  own  expense,  to 
take  the  water  into  their  dwellings,  stores,  and  warehouses, 
free  of  charge :  but  that  a  Water  Tax  of  one  fourth  of 
one  per  cent,  be  levied  "  on  all  goods,  wares,  and  mer- 
chandize, sold  within  this  city ;  also,  on  commissions  aris- 
ing from  the  negociation  and  sale  of  all  foreign  exchange ; 
also,  on  the  cost  of  erection  of  all  houses,  and  the  building  of 
ships  or  vessels ;  also,  on  all  other  manufacturing  and  me- 
chanical productions  ;  also,  on  the  salaries,  fees,  or  perqui- 
sites of  all  professions,  when  the  same  shall  amount  to  seven 
hundred  dollars." 

From  other  sources  suggestions  have  been  made  of  the 
propriety  of  imposing  a  specific  tax  upon  all  the  combustible 
property  in  the  city,  as  being  specifically  benefitted  by  the 
increased  protection  against  fire  which  the  Aqueduct  has 
thrown  around  it.  Others  have  proposed  to  tax  the  Fire  In- 
surance Companies  on  all  the  premiums  received  by  them  ; 
while  others  have  suggested  that  the  city  itself  shall  become 
the  general  insurer  of  all  the  combustible  property  within  its 
limits. 

The  task  is  not  easy,  to  select  from  these  various  and  con- 
flicting plans  that  which  will  best  do  justice  to  all  our  varied 
interests,  and  promote  the  permanent  welfare  of  the  city. 
Still  more  difficult  would  it  be  to  apportion  among  the  diffe- 
rent divisions  of  property,  by  a  pecuniary  classification,  the 
different  degrees  of  benefit  which  the  introduction  of  the 
Croton  water  has  brought  with  it ;  and  the  more  so,  be- 
cause those  particular  benefits  are  inseparably  intermingled 
with  the  general  benefit  which  the  work  has  diffused 
throughout  all  our  interests.  Thus  the  preservation  of  the 


559  [Doc.  No.  58. 

general  health :  the  improvement  of  morals  by  increased 
cleanliness  and  sobriety :  the  regularity  and  certainty  of 
commercial  affairs  secured  by  protecting  the  commu- 
nity as  a  mass,  against  the  general  derangement  of  busi- 
ness produced  by  extensive  conflagrations:  the  increased 
attractiveness  of  the  city,  by  being  rendered  more  com- 
fortable, ornamental  and  desirable,  as  a  place  of  business 
or  abode : — all  these  enter  as  component  parts  into  the 
aggregate  amount  of  general  benefit,  the  value  of  which, 
in  dollars  and  cents,  it  is  impracticable  accurately  to  esti- 
mate or  apportion. 

It  is  not  to  be  doubted,  however,  that  the  sum  total  of  this 
general  benefit,  even  now,  and  while  the  Aqueduct  is  only 
in  the  earliest  stages  of  its  usefulness,  far  exceeds  in  pe- 
cuniary value  the  interest  on  its  cost ;  and  the  reflection  is 
not  only  encouraging  but  highly  gratifying,  that  while  the  bur- 
then imposed  by  the  work  is  either  stationary  or  in  a  train  of 
rapid  diminution,  its  benefits  are  destined  to  increase  for  ages 
to  come,  with  the  expansion  and  development  of  the  metro- 
polis. The  truth  of  this  is  strikingly  manifest  when  we 
compare  the  present  with  the  prospective  benefit  conferred 
upon  those  particular  branches  of  property,  which  are 
protected  by  the  Aqueduct  from  the  hazards  of  fire.  The 
combustible  property  in  the  city  thus  protected,  may  now  be 
valued  at  one  hundred  and  fifty  millions  of  dollars — but 
within  no  very  distant  future,  it  must  increase  to  four  or 
five  hundred  millions,  while  the  cost  of  the  structure  afford- 
ing benefits  so  immense,  and  capable  of  such  constant  in- 
crease, will  remain  the  same. 

There  are  now  in  operation  in  this  city  twenty-eight  Fire 
Insurance  offices,  besides  several  agencies  of  offices  from 
other  States.  The  Board  have  ascertained  that  in  the  year 


Doc.  No.  58.]  560 

%_  " 
ending  on  the  first  of  May,  1842,  the  amount  of  premium 

paid  at  twenty-five  of  these  offices,  for  insurance  of  property 
in  this  city,  was  $860,000.  The  value  of  the  property  in- 
sured was  about  $100,000,000.  It  is  probable  that  fully 
one-third,  if  not  one-half  of  the  combustible  property, 
moveable  and  immoveable,  in  this  city,  remains  uninsured, 
though  not  the  less  protected  by  the  Aqueduct  against  the 
hazard  of  fire.  If  one  third  be  assumed  as  the  amount,  the 
present  value  of  the  combustible  property  may  be  taken  at 
150  millions,  and  the  premium  necessary,  before  the  intro- 
duction of  the  Croton  Water,  to  insure  it,  at  1,290,000 
dollars. 

From  the  best  information  the  Board  have  been  able  to 
obtain,  the  rates  of  premium  since  the  introduction  of  the 
water  have  been  reduced  on  stores  and  merchandize  about 
20  cents  on  the  hundred  dollars,  and  on  dwelling  houses 
from  5  to  10  cents.  It  is  probable  that  the  rates  on  dwelling 
houses  will  be  still  further  reduced.  The  amount  of  pre- 
mium saved  cannot  be  less  than  25  per  cent,  on  the  amount 
previously  paid,  shewing  a  present  annual  saving,  actually 
realized,  equal  to  one  quarter  of  the  81,290,000  above  stated, 
or  $322,500. 

The  question  then  arises,  shall  the  owners  of  the  property 
actually  realizing  this  annual  saving  of  $322,500,  be 
subjected  to  a  specific  tax  on  the  very  property  benefitted 
yielding  back  a  portion  at  least  of  that  sum,  or  shall  that 
property  bear  only  its  rateable  portion  of  a  general  tax  to 
be  laid  on  all  the  property  in  the  city,  combustible  and  in- 
combustible ? 

And  first,  as  to  buildings — the  number  of  buildings  in  the 


561  [Doc.  No.  58. 

compact  part  of  the  city,  is  stated  in  the  last  annual  report 
of  the  Comptroller  at  33,079  ;  the  value  of  which,  if  taken  at 
83000  each,  would  be  $99,237,000,  or  say  one  hundred  mil- 
lions. A  specific  tax  of  ten  cents,  for  the  amount  saved  in 
the  insurance,  on  each  hundred  dollars  of  this  sum,  would 
yield  but  $100,000;  making  it  apparent  that  the  propo- 
sition introduced  into  the  Board  of  Assistant  Aldermen, 
to  impose  a  specific  tax  on  these  buildings  of  $292,500  by 
levying  3  per  cent,  on  the  rent,  would  operate  with  undue 
severity,  especially  as  these  very  buildings  form  a  large 
component  part  of  the  real  estate  assessed  at  176  millions, 
and,  in  that  shape,  already  pay  their  full  quota  of  the  general 
tax. 

And  next,  as  to  merchandize  and  other  moveable  proper- 
ty— the  value  of  this  description  of  property  now  insured,  is 
not  far  from  60  millions  of  dollars,  and  the  total  value,  in- 
cluding the  portion  left  uninsured,  may  be  one  hundred 
millions.  It  is  not  probable  that  any  scheme  of  assess- 
ment, however  searching  or  inquisitorial,  could  detect  more 
than  that  amount.  It  is  true  that  a  tax  of  20  cents,  for  the 
amount  saved  in  the  insurance  on  each  $100  of  that  sum, 
would  produce  $200,000 ;  but  the  question  arises  whether 
in  the  present  depression  of  our  commerce  and  manufac- 
tures, the  imposition  of  such  a  tax,  striking  directly  at  both 
those  interests,  and  burthening,  as  it  would,  not  only  the 
merchandize  in  the  warehouses  of  our  merchants,  but  the 
stocks  in  trade  in  the  work-shops  of  our  mechanics  and 
manufacturers,  would  be  consistent  with  sound  and  enlight- 
ened policy  ? 

There  is,  moreover,  a  legal  objection  to  the  tax  pro- 
posed, which  must  be  disposed  of  before  discussing  its 
expediency.  The  constitution  of  the  United  States  pro- 


Doc.  No.  58.]  562 


•f* 


hibits  the  individual  States  from  laying  any  imposts  or  duties 
on  imports.  The  Supreme  Court  of  the  United  States,  in  the 
year  1827,  elaborately  examined  the  effect  of  this  prohibi- 
tion upon  a  law  passed  by  the  State  of  Maryland,  requiring 
importers  of  foreign  merchandize  in  that  State  to  pay  a  tax 
for  a  license  for  that  purpose  ;  and  in  deciding  upon  its  va- 
lidity (Brown  vs.  State  of  Maryland,  12  Wheat.  Rep.,  442) 
the  Court  declared  that  the  right  to  import  implied  the  right 
to  sell,  and  that  any  impost  or  tax  by  a  State  on  articles  im- 
ported which  had  paid  duties  to  the  United  States  on  the 
importation,  before  those  articles  should  have  been  once  sold 
and  thus  mixed  up  with  the  mass  of  property  in  the  country, 
would  be  unconstitutional  and  void. — "  While  the  thing  im- 
ported," says  Chief  Justice  Marshall  in  pronouncing  the 
decision,  "  remains  the  property  of  the  importer  in  his  ware- 
house, in  the  original  form  or  package  in  which  it  was  im- 
ported, a  tax  upon  it  is  too  plainly  a  duty  upon  imports  to 
escape  the  prohibition  in  the  constitution." 

The  effect  then  of  this  prohibition  would  be  to  prevent 
the  levying  of  a  specific  tax  either  for  the  Croton  Water 
debt,  or  any  other  purpose,  upon  all  that  portion  of  the  mer- 
chandize in  question,  consisting  of  foreign  imports  remaining 
in  bulk,  or  original  packages,  in  the  hands  of  the  importer, 
embracing,  it  is  believed,  at  least  one-third  of  the  total 
amount ;  while  the  burthen  of  the  tax  would  fall  exclusively 
upon  the  retail  merchants  or  smaller  traders,  who  might 
have  purchased  the  remaining-  two-thirds,  and  thus  have  mixed 
it  up  in  the  general  mass  of  the  personal  property  of  the 
city;  so  that,  in  effect,  the  tax  would  be  laid  exclusively  upon 
our  own  citizens,  while  the  foreign  importers  or  their  agents, 
who  are  the  very  persons  that  the  advocates  of  this  mea- 
sure particularly  seek  to  reach,  would  escape  altogether. 


563  [Doc.  No.  58. 

In  respect  to  the  other  branch  of  the  proposition  in  the 
Board  of  Assistant  Aldermen,  to  lay  a  specific  tax  of  one  half 
of  one  per  cent,  on  all  personal  property,  it  is  to  be  observed 
that  personal  property,  when  found  by  the  assessors,  already 
pays  the  same  rate  of  tax  as  that  which  is  borne  by  real  estate : 
to  wit,  10  cents  on  the  hundred  dollars  to  the  State, 
20  cents  to  the  city  for  the  Water  Debt,  and  55  cents  to 
the  city  for  general  purposes.  There  seems  to  be  no  good 
reason  for  imposing  an  additional  burthen  of  50  cents  on 
this  description  of  property  alone,  and  so  far  as  it  might 
operate  to  drive  monied  men  and  monied  capital  from  the 
city,  it  would  be  unwise  and  inexpedient. 

The  proposition  "  to  levy  a  Water  Tax  of  one-fourth  of 
one  per  cent  on  the  sales  of  all  goods,  wares,  and  merchan- 
dize sold  within  the  city,"  has  also  been  attentively  con- 
sidered ;  but  it  would  seem  to  be  equally  open  as  a  specific 
tax  on  the  merchandize  itself,  to  the  constitutional  difficulty 
above  adverted  to. 

And  even  if  this  difficulty  were  removed,  as  some 
have  proposed  to  do,  by  assuming  the  tax  in  question  to  be 
only  an  exercise  of  what  are  called  "  police  powers,"  and 
therefore  not  within  the  intent  and  meaning  of  the  Consti- 
tution,— yet  the  Croton  Aqueduct  Board,  after  duly  weigh- 
ing the  advantages  and  disadvantages  of  the  measure  pro- 
posed, feel  bound  to  declare  their  belief  that  any  specific 
tax  on  merchandize  or  merchants,  which  would  operate  to 
burthen  or  discourage  commerce,  is  of  very  doubtful  expe- 
diency. They  need  not  urge,  what  indeed  must  be  ap- 
parent, that  the  trade  of  this  commercial  city  supplies  the 
very  life-blood  of  its  existence.  The  land  on  which  it  is 
built  is  comparatively  worthless,  except  as  a  seat  of  commerce, 
and  a  place  for  traders.  To  this  great  and  cardinal  interest, 
95 


Doc.  No.  58.]  564 

all  others~are  necessarily  subordinate.  To  foster  commerce, 
— to  encourage  traders, — to  afford  them  every  necessary 
facility  and  protection, — to  render  our  city,  as  a  mart  of 
trade,  accessible,  safe,  cheap,  and  commodious, — has  hitherto 
been  our  steady  policy.  With  the  interests  and  prosperity 
of  our  merchants,  the  interests  and  prosperity  of  our  land- 
holders are  inseparably  interwoven.  Experience  has  taught 
us  little,  if  we  have  not  learned  that  real  estate  languishes 
when  commerce  declines.  We  cannot  clog  or  obstruct  this 
vital  stream  of  our  prosperity  without  paralyzing  all  our 
permanent  interests.  Our  merchants  have  just  passed 
through  a  calamitous  period,  and  real  estate  has  correspond- 
ingly suffered.  Can  it  be  wise  at  a  moment  like  the  present, 
just  as  the  prospect  dawns  of  a  reviving  commerce,  to  fetter 
it  with  a  tax,  novel  in  its  character,  inquisitorial  in  its  details, 
vexatious  in  its  collection,  and,  to  say  the  least,  of  doubtful 
legality  ?  The  tax  might  possibly  extract  from  merchandize 
and  merchants  8200,000  annually,  and  lessen  to  that  amount 
the  general  tax  on  the  aggregate  amount  of  real  and  person- 
al property,  but  could  not  the  owners  of  our  33,000  houses 
better  afford  to  sustain  alone  the  whole  of  that  burthen,  being 
but  about  six  dollars  on  the  average  for  each  house,  than  to 
experience  the  diminution  of  rents  which  an  embarrassed 
trade  is  sure  to  bring  with  it  ? 

The  same  remarks  apply  with  similar  force  to  that  part  of 
the  proposition  which  proposes  a  tax  "  on  all  manufacturing 
or  mechanical  productions."  By  the  recent  census  it  is 
shown  that  43,380  of  our  population  are  employed  in  "  man- 
ufactures and  trades."  They  form  a  very  valuable  and  desi- 
rable portion  of  our  community,  and  it  would  be  injudicious 
in  the  extreme,  by  a  specific  tax  on  the  products  of  their 
industry,  to  induce  them  to  transfer  to  other  cities  them- 
selves and  their  families. 


565  [Doc.  No.  58. 

The  proposition  to  tax  "  the  cost  of  erection  of  all  houses, 
and  the  building  of  ships  and  vessels,"  would  appear  to  be 
liable  to  similar  objections,  as  tending  to  impede  and  embar- 
rass those  particular  branches  of  our  mechanical  industry'; 
and  inasmuch  as  the  augmentation  of  the  water  revenues  is 
principally  to  be  occasioned  by  the  increase  of  houses,  it 
can  hardly  be  good  policy  to  discourage  that  increase  by 
imposing  additional  burthens  upon  the  cost  of  their  erection. 

The  proposed  tax  on  "  all  commissions  on  the  negotiation 
and  sale  of  foreign  exchange,"  it  is  believed  would  be  diffi- 
cult to  enforce,  so  as  to  arrive  at  any  thing  like  equality — 
while  the  inquiries  it  would  be  necessary  to  prosecute,  re- 
quiring a  disclosure  of  the  private  affairs  of  all  persons  re- 
mitting monies  to  foreign  countries,  would  probably  be  felt 
by  our  citizens  as  being  vexatious  and  oppressive  in  the 
highest  degree. 

As  to  the  proposed  tax  "  on  salaries,  fees,  and  perquisites 
of  all  professions,"  it  may  be  observed,  generally,  that  no 
tax  on  particular  offices,  professions,  callings,  or  trades,  can 
be  permanently  popular,  except  as  forming  part  of  a  general 
income  tax — a  measure  which  hardly  seems  called  for  by 
the  present  exigency. 

In  respect  to  the  suggestion  which  has  been  made,  that 
a  tax  should  be  laid  on  all  Fire  Insurance  Offices  for  premi- 
ums received  by  them,  it  will  be  obvious  that  such  a  tax 
would  drive  the  business  of  insurance  wholly  into  the  hands 
of  foreign  Insurance  Companies  beyond  our  jurisdiction, 
and  consequently  not  amenable  to  our  laws.  The  pro- 
position that  the  city  itself  should  become  the  general  insu- 


Doc.  No.  58.]  566 

rer  of  all  the  combustible  property  within  its  limits,  in  the 
present  state  of  public  opinion,  which  calls  rather  for  a  di- 
minution than  an  increase  of  the  liabilities  and  of  the  busi- 
ness of  the  city  government,  is  plainly  inadmissible. 

. 

From  the  examination  thus  made  of  the  various  pro- 
positions and  expedients  for  raising  the  interest  of  the  Water 
Debt  by  specific  taxes  on  particular  branches  of  property  or 
business,  it  appears  that  objections  of  greater  or  less  force  ex- 
ist against  them  all ;  while,  on  the  other  hand,  it  is  certain  that 
a  general  tax  will  take  from  the  aggregate  amount  of  property 
assessed  no  more  than  a  just  equivalent  for  the  aggregate 
benefit  it  receives.  It  doubtless  is  true  that  particular  por- 
tions of  the  property  assessed  may  receive  greater  benefits 
than  other  portions  from  the  introduction  of  the  water,  but 
the  same  remark  would  apply  to  many  other  heads  of  city 
expenditure,  few  of  which  could  be  found  diffusing  their  be- 
nefits in  more  just  proportion  than  the  Croton  Aqueduct 
throughout  every  portion  of  society,  and  every  branch  of 
business  or  property. 

It  is  believed,  however,  that  the  general  system  of  taxation 
now  in  force,  and  to  the  operation  of  which  we  are  accus- 
tomed, might  be  improved  by  the  adoption  of  efficient  mea- 
sures, which  should  bring  within  the  reach  of  the  assessors 
considerable  amounts  of  personal  property,  that  now  es- 
cape taxation,  not  only  for  the  Croton  Water,  but  all  other 
city  purposes.  The  total  amount  of  personal  property  as- 
sessed is  but  61  millions  of  dollars,  whereas  it  is  known  that 
the  taxed  capital  of  the  rnonied  incorporations  alone,  exclu- 
sive of  their  real  estate  and  stocks  not  taxable,  amounts  to 
825,564,677,  to  wit : 


567  [Doc.  No.  58. 

Of  the  Banks 816,388,452 

Fire  Insurance  Companies 4,535,214 

Marine  Insurance  Companies 2,004,987 

Trust  Companies 2,631,424 


$25,564,677 

And  that  there  is  due  to  individuals,  on 
mortgage,  at  least  forty,  and  more  pro- 
bably fifty  millions,  but  say 36,000,000 


Making  an  aggregate  of  $61,564,677 

When  it  is  seen  that  these  items  alone  exceed  the  total 
amount  of  personal  property  assessed,  and  that  they  embrace 
no  part  of  the  shipping,  State  and  city  stocks,  foreign  bank 
stocks,  capital  employed  in  trade,  and  debts  not  on  mortgage 
belonging  to  our  citizens,  and  justly  taxable  under  existing 
laws,  it  will  be  evident  that  a  large  amount  of  personal  pro- 
perty, and  probably  equal  in  value  to  at  least  sixty-one 
millions,  in  addition,  now  escapes  taxation,  and  contributes 
nothing  to  the  expenses  of  the  City  Government.  Any 
improvement  in  the  present  mode  of  assessment,  which 
should  bring  the  property  thus  escaping  within  the  reach 
of  the  assessors,  would  annually  extract  from  it  not  only 
$170,800  for  its  share  of  the  interest  of  the  Water  Debt,  but 
$335,500  in  addition  towards  the  general  expenses  of  the 
city. 

In  conclusion  then,  the  Croton  Aqueduct  Board,  while  en- 
tertaining the  highest  respect  for  the  sources  from  which  the 
resolutions  referred  to  them  have  proceeded,  nevertheless 
feel  bound  to  report,  that  in  their  opinion  the  adoption  of 
those  resolutions  would  not  be  advisable,  and  they  therefore 


Doc.  No.  58.]  568 

*•*••*:**.*; 

recommend  that  existing  laws  be  left  unaltered,  except  so 
far  as  may  be  required  to  render  more  efficient  the  present 
powers  of  the  assessors ;  that  the  interest  on  the  Water 
Debt  be  raised,  as  at  present,  by  a  general  tax  on  all 
property,  real  and  personal ;  and  that  the  Water  Rents, 
now  pledged  to  the  public  creditor,  be  continued  at  moderate 
rates,  and  scrupulously  applied,  together  with  the  proceeds 
of  the  public  property  not  required  for  public  use,  to  the  re- 
demption of  the  principal. 

The  Board  are  not  unmindful,  that  the  tax  which  the 
Aqueduct  thus  renders  necessary,  may  be  viewed  with 
apprehension  by  many  of  their  fellow  citizens,  and  espe- 
cially by  some  of  the  landholders  of  our  city,  but  it  is 
confidently  believed  that  these  apprehensions  will  be  dispel- 
led or  lessened,  when  the  amount  of  benefits  received  shall 
be  compared  with  that  of  the  burthens  imposed.  It  is  not 
to  be  denied  that  for  the  first  few  years  the  tax  of  twenty- 
eight  cents  on  the  hundred  dollars  in  addition  to  our  other 
taxes,  may  be  felt  to  be  inconvenient,  but  that  ratio  will 
steadily  decline  with  the  gradual  reduction  of  the  principal 
of  the  debt,  and  will  be  further  lessened  by  the  increase  of  the 
city,  by  which  the  burthen  will  be  more  widely  distributed. 
The  tax,  even  if  it  were  retained  at  this  its  highest  rate,  for  ten 
years  to  come,  would  require  a  contribution,  for  the  whole 
period,  amounting  in  the  aggregate  to  less  than  three  per 
cent. — and  who  can  doubt  but  that,  within  that  period,  the 
effects  of  the  Aqueduct  in  promoting  the  growth  and  pros- 
perity of  the  city,  will  add  more  than  three  per  cent,  to  the 
value  of  real  estate?  The  revenues  of  the  work  for  the  first 
few  years,  small  and  but  moderately  increasing,  will  ere 
long  yield  an  amount  nearly  if  not  fully  adequate  to  all  the 
wants  of  the  city  treasury.  Little  could  be  gained  in 


».     -* 

569  [Doc.  No.  58. 

the  way  of  present  relief,  by  relinquishing  those  revenues, 
but  much  might  be  lost  in  our  future  resources.  The  work, 
if  properly  cherished,  may  become  a  perpetual  fountain  of 
wealth  to  the  city,  affording  a  revenue  as  far  beyond 
our  present  estimates,  as  the  income  of  the  Erie  Canal  has 
exceeded  the  anticipations  of  its  early  projectors. 


By  pursuing  then  a  steady  and  careful  policy,  we  shall 
soon  lighten  materially  the  present  burden  of  taxation,  keep 
it  in  continuous  and  rapid  diminution,  and  effert  an  extin- 
guishment of  the  whole  debt,  even  before  the  times  fixed 
for  its  redemption.  The  Water  Rents,  freed  at  that  period 
from  the  pledge  which  now  guarantees  their  specific  appro- 
priation, will  then  amply  contribute  to  such  purposes  of  pub- 
lic utility  as  the  expanding  interests  of  the  community  may 
require  ;  to  the  payment,  in  aid  of  very  moderate  taxation, 
of  the  general  expenses  of  the  city;  or  to  the  advancement 
of  objects  which  experience  and  honorable  competition  may 
suggest,  as  requisite  to  secure  its  enduring  superiority  in 
industry,  enterprise,  population,  and  wealth. 

JOHN  L.  LAWRENCE, 
J.  PHILLIPS  PHCENIX, 
M.  VAN  SCHAICK, 
C.  W.  LAWRENCE, 
SAMUEL  B.  RUGGLES. 

New  York,  Dec.  27,  1842. 


*» 


*. 

rji 


" 


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